Procuring health care services for the NHS

Health iStock 000005083391XSmall 146x219New regulations set out the principles and procedures for NHS England and clinical commissioning groups when it comes to specialist procuring activities and commissioning. Richard Auton looks at what they say.

On the same day as the new structure for the NHS went live (1 April 2013), the National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations came into force. 

What do they apply to?

The Regulations apply in respect of the procurement of: "health care services for the purposes of the NHS" by NHS England (originally the NHS Commissioning Board) and the Clinical Commissioning Groups (CCGs) set up under the Health and Social Care Act 2012 (Commissioning Body).  

The Regulations set out principles and provide a procedure for the specialist procuring activities and commissioning to be undertaken by these new bodies. Unlike under the Public Contracts Regulations 2006 (the 2006 Regulations), these Regulations apply regardless of value. The Regulations also provide that where they receive support or assistance in these activities, the Commissioning Body must ensure that those supporting the activities comply.   

Principles under the rules

The first duty imposed by the Regulations on the Commissioning Body is to act with a view to securing the needs of the users, improving the quality of the services, and improving efficiency in the provision of the services. In terms of improving quality and efficiency the duty is to consider appropriate means, including:

  • integrating provision including with other health care services, health-related services, or social care services;
  • enabling providers to compete to provide the services;
  • allowing patients a choice of provider of the services.

There is a duty to act in a transparent and proportionate way, and treat providers equally and in a non-discriminatory way. A relevant body must have arrangements for enabling providers to express an interest in providing any health care service for the purposes of the NHS.  

Anti-competitive behaviour and conflicts of interest

There is a further duty when commissioning health care services not to engage in anti-competitive behaviour - that is behaviour which may prevent, restrict or distort competition, unless it is in the interests of people who use those services.


A relevant body must not award a contract where conflicts, or potential conflicts, between the interests involved in commissioning and the interests involved in providing them affect, or appear to affect, the integrity of the award of that contract. Interests include those of its employees and members of the relevant body or of parts of its governance structure. In relation to each contract, a record must be maintained as to how it managed any conflict of interest.

Procedure

The Regulations prescribe the procedure to be followed by the Commissioning Body. Firstly, it must publish a Contract Notice on the website maintained by NHS England for that purpose. Similar to an OJEU contract notice this must include a description of the services required and the criteria against which any bids for the contract will be evaluated. 

An exception to this is provided where the relevant body is satisfied that the services to which the contract relates are capable of being provided only by one particular provider. 

The Commissioning Body must establish and apply transparent, proportionate and non-discriminatory criteria for determining with which providers to enter into a framework agreement and for selecting providers to bid for contracts. 

After award the Commissioning Body must maintain, and publish on the website maintained by NHS England, a record of each contract including the name of the provider and the total amount to be paid

Consequences of non-compliance

There are potentially serious consequences for a Commissioning Body that does not comply with the Regulations.

Monitor, the statutory NHS regulatory body, will have oversight over compliance with the requirements of the Regulations. It is given the role of investigating complaints that a Commissioning Body has failed to comply with the Regulations. It can give directions to a relevant body and where there is a sufficiently serious failure to comply with key provisions it has power to set aside the entire contract or a particular provision. 

Further anyone who can show that a failure to comply with the Regulations has caused them loss or damage could seek compensation in the courts. It will be important for the CCGs and NHS England to ensure that their processes are compliant and that they document the key decisions to enable them to defend any challenge.

Richard Auton is a director at Walker Morris. He can be contacted on 0113 283 2575 or by This email address is being protected from spambots. You need JavaScript enabled to view it.. Richard regularly contributes articles and updates to reach.... ®, the free Walker Morris knowledge database and alerter service.